Messonnier v. Kauman

The Chancellor.

The decision of this case depends upon the question, whether the plaintiff is entitled to be paid under the assignment of the 7th of February, in exclusion of the other creditors; or whether that deed being duly cancelled, he can only come in for his pro rata dividend, under the trust of the 28th of February, 1811.

The assignment of the 7th of February was from G. S. G. & Co. to Kauman, for the benefit of K. and the plaintiff, of the proceeds of the cargo of the ship Eastern Star, on the outward voyage, and of the policies on the cargo and freight. It was an assignment under hand and seal.

This assignment does not specify the particular debts for which the assignment was made. It is general, and would, of course, entitle the assignees to hold the property as a security for all their then existing demands and responsibilities. It would entitle the plaintiff to hold the property in pledge1 for his reimbursement and indemnity, in supplying the cargo of the ship, and endorsing the five bills of exchange which had been drawn on G. S. G, fy Co., and accepted by them. The plaintiff had an equitable pretension, superior to that of any other creditor, (for none had then acquired any actual legal lien) to be indemnified out of the proceeds of the very cargo which he himself had furnished. If we attend to the history of the facts which led to this assignment, we shall find that the plaintiff claimed if, and expected it to be rnade for his benefit exclusively, and to the extent of his whole demand. The proposition came from the debtors themselves.

A letter from K., of the 31st of January, 1814, mentions, that G. S. G. fy Co. had applied to him to procure from the plaintiff aid to enable them to take up the three February bills; and what did they promise as a consideration for this aid ? They said that they would then look upon the plaintiff's claim as a privileged one, and that in no case whatever would they suffer him to be injured by them ; and they offered, as a security for his advances as above stated, to make over to him the proceeds of the outward cargo, with the policies.

The offer in this letter is a' little equivocal, and if not designed as security for his whole demand, would be apt to mislead the plaintiff, especially considering him as a foreigner not well versed in the import of terms in our language. It promises him, in the first place, that his claim shall be privileged. This would lead any person of ordinary understanding, to suppose they meant his whole debt, and especially when they added that he should never suffer by them. But, afterwards, they offer the proceeds as security for his said advances, which, perhaps, strictly considered, would apply only to the special aid then called for. The plaintiff, however, construed- the offer in a larger sense. By his answer of the 2d of February, he accedes to the proposal, but evidently understands the proposal to be, that the ship, as well as cargo, was to be assigned, and that the assignment was to cover his whole demand of 14,985 dollars, with interest. He clearly mistook the terms as to the ship, but he had colour for the latter construction. Kauman, by his letter of the 6th of February, appears to have communicated the answer of the plaintiff to G. S. G. 8f Co., for he says, that they cannot assign the ship, (and gives the reason,) but that they were about executing, in due form, the transfer of the cargo, policies, and proceeds. Nothing is said as to what extent of demand the assignment is to cover. It is only added, that it was to be for the joint benefit of the plaintiff and K. This silence of G. S. G. 8f Co. on the 6th of February, after they had been duly apprized of the plaintiff’s understanding of their proposal, and after they had corrected it, as to the ship, and only as to the ship, is decisive of their assent to his demand, that the assignment should cover his whole responsibility. I consider K., in this transaction, to have been as much the agent of G. S. G. 8/ Co., as of the pla intiff. He was their mutual agent, and when the assignment was made on the 7th of February, and in general terms, without designating any particular part of the plaintiff’s claim to which it was to be confined, the construction is no less just than legal, that it covered his whole responsibility, to the amount of the 14,985 dollars. Here, then, the plaintiff acquired a right vested and absolute, by the assignment of the 7th of February, and nothing but some subsequent act of his, done freely, and with an understanding of all his rights, could deprive him of that legal security.

But the plaintiff when he came to be duly informed of the contents of the assignment, was dissatisfied, that K. had taken it, not for the plaintiff alone, but for their joint benefit, and this led to some correspondence between them.

This difficulty was, however, soon removed, for Kauman in his letter to the plaintiff, of the 14th of February, says, that the plaintiff was perfectly safe, for though the transfer was in their joint names, yet it was intended only to secure the surplus to K., after the plaintiff was secured the whole amount of his claim.

We are next to see, whether the plaintiff subsequently deprived himself of the benefit of this assignment. As it then stood, it was for the security of his whole demand, to be first and exclusively paid. This was precisely his declared object from the beginning, and it is scarcely possible to believe, that he would afterwards, intentionally and freely, part with this great and just advantage, for a pro rata dividend, under the deed of the 28th of February.

The letters from the plaintiff of the 6th, 9th, 12th, 13th, and 14th of February, all speak the same language. They all show his clear and decided intention to have the assignment as a cover for his whole demand, and to make that assignment a condition of his furnishing funds to take up the February bills. His object in sending on his friend Pascaulf was for explanation, while he was under the impression that the assignment was not for his exclusive benefit. This appears from his letter to Kauman of the 19th of February, in which he says, that the explanation given by K. that he was only to come in for the surplus, after the demands of the plaintiff were satisfied, superseded the necessity of sending on Pascaulf It is worthy of notice too, that in this last letter, he relies upon the assignment of the 7th, and wishes to have it recorded, so as to give it due validity.

The arrival of P. at Neio-York open's a new scene in the history of this transaction, in which the deed of the 7th of February is, somehow or other, and certainly not with the consent or knowledge of the plaintiff at the time, put out of existence, and the plaintiff left to look for his indemnity^ as' a pro rata creditor only, under the deed of trust of the 28th of February.

The plaintiff, by letter of the 14th of February, informs G. S. .G 8f Co., that the assignment of the 7th of February was not what was agreed to, as it ought to have been in his name only, for the whole of his demand, and that he sent on his friend P., in order to settle the business in his name, to their mutual satisfaction, and he trusted that G. S. G. Sf Co. would give him the satisfaction he had a right to expect. This letter, it is admitted, contains all the powers of P. who was a Frenchman of advanced age, and so little versed in the English language, that an interpreter was requisite to explain part of the conver™ Nations. This is proved by Nathan, a witness for the defendant. '

It is pretty evident that the mission of P. was to obtain such security as the plaintiff had looked for under the deed of the 7th of February, which security he had discovered, by the explanatory letter of Kauman, of the 14th of February, (the same day on which the plaintiff had sent on P.) did really exist under that assignment. If P. was to settle the business to their mutual satisfaction,' the settlement was to depend upon their mutual ratification„ That letter never authorized P. to give up a vested right under the deed of the 7th of February, until some new security was actually given, equivalent in its effects, or, at least satisfactory to both parties; and, certainly, when the letter of the 19th of February to K. was received, (which must have been, according to the course of the mail, oh the 20th of February,) it superceded all further negotiation with Pascaulf. The plaintiff had then ratified the assignment of the 7th of February, and I consider every communication to K as equal to a communication with G. S. G. &f Co., for he was as much their agent as the plaintiff’s, in the whole negotiation. At what precise time the assignment of the 7th of February was given up by K to Gr S. G. 8f Co. to be cancelled, does not distinctly appear, if it was done before the new assignment was executed on the 28th of 'February, it was done with too much precipitation. No prudent man would part with one security, until the substitute was prepared and executed. The defendant’s witness, Seiecas Nathan, says, that the new assignment was executed when it bore date, which is on the 28th of February, and this was probably after P. had left New-York, on his return to the plaintiff. Yet it is singular, if not astonishing, to learn how G. S. G. fy Co. and K. had arranged matters as early as the 20th of February. By a letter to the plaintiff of that date, Kauman says that G. S. G. 8f Co. wish to pay all their creditors alike, and refuse any new transfer to the plaintiff alone, and that he and P had already called on Mr. Jones to consult and agree abo oí a new assignment to pay the plaintiff with a number of other creditors, rateably. This letter was eight days before any new assignment was executed; yet Kauman says, the first transfer, by this arrangement,- was rendered null and void. This letter was also written six days after K. had agreed that the deed of the 7th of February was for the prior and exclusive benefit of the plaintiff, and that he was-only to take the surplus; and it was written long after G. S. G. Co. had declared that the plaintiff’s claim should be privileged, if he would furnish remittances to take up the February bills. It appears to me, that G. S. G. Co. had, by this time, discovered that the assignment of the 7th of February was inconvenient to them, though it had answered one of their objects, viz. the receipt of funds of the plaintiff to take up their February bills. It appears to me, also, that Kauman had become dissatisfied with- his explanation of the I4th, that the plaintiff was tobe first paid, and was the willing instrument of G. S. G. 8f Co. in destroying that assignment. Why declare so prematurely, that the first transfer had-become null and void? and why not arrest all this new arrangement, after the receipt of the plaintiff’s letter of the 19th of February, saying that he was satisfied with the transfer? The answer of Kauman, which is also the answer of G. S. G. fy Co. says, the deed of the 7th of February was destroyed before the receipt of the letter of the plaintiff, of the 19th of February. Such a premature destruction of it is, in my judgment, a very strong mark of fraudulent design.

P. say», that he was informed, on his arrival in New-York, by Ai,-that the deed of the 7th of February was destroyed. He denies that he had any authority to cancel that deed, or that he ever consented to it, or ever saw it, or that he ever, saw or knew the contents of- the second assignment. He never had or assumed any authority, and was only sent,, -as a friend of the plaintiff, to receive payment, or to take security for the plaintiff singly. Seixas Mithan (who was ut that time one of the house of G. &. G. ty Co.) contradicts the testimony of P. in several particulars, and says P. did agree to the deed of the 28th, and to the surrender of the first deed, and did act as the authorized agent of •the plaintiff.

There are several circumstances in the testimony of Nathan which affect its credit. He admits that P. left New York for Baltimore the latter end of February, and, therefore, he probably left it before the execution of the second deed. He says that Mr. Jones asked P. if he was willing that all that had been done should be considered as void; and he said he was,, and that the deed of the 7th, was afterwards destroyed; and yet Mr. Jones confesses that he never saw or heard of the deed of the 7th of February, until after the execution of the deed of the 28th of February.

I cannot resist the impression, that the deed of the 7th of February was surreptitiously and fradulently cancelled, by arrangement between G. S. G. & Co. and Kauman, and that Pascaulf was not duly authorized, and never consented to destroy that deed, and that the plaintiff never gave his free and voluntary assent to it.

The plaintiff, by his two letters of the 24th of February, insists on adhering to the deed of the 7th, and expressly dissents from the new arrangement, and expresses himself with the true feeling and just indignation of a man on whom the grossest imposition had been practised.

His acquiescence, afterwards, in the destruction of the first, and in the substitution of the second assignment, was the acquiescence of despair, and a submission to destiny. If the thing be not practicable, says'he, (that is, to be secured according to his original expectation and demand,) I must at last submit. In one of these letters, he says, he will not provide for the March bills, without the security of the 7th of February; and yet in a letter of the 1st of March, K. informs him that G. S. G. 8f Co. hinted that unless he would provide for these March bills, he would not be considered a privileged creditor. This was an unjust threat and cruel sarcasm, to an injured creditor, whom they had made the victim of their intrigues, and whom they held in a kind of duress. To talk of the plaintiff’s free and voluntary ratification of the second assignment, and surrender of the first, is idle and absurd. Every thing that he said afterwards was extorted from him by necessity. His letter of the 26th of March speaks of his rateable share of the proceeds ; but in his letter of the 13th of April, he requests payment out of the proceeds, if not pf the whole, at least of part of his demand; and in his letter of the same date, to G. S. G, fy Co. he claims from them the payment of his advances put of the proceeds. These letters cannot conclude him from resorting to his tide under the deed of the 7th of February. They were written under mistaken impressions, that his rights had been sacrificed and lost, beyond redemption. His dissatisfaction and constant uneasiness, under the pressure of the impositions practised upon him, are very apparent from those very letters; for in that of the 13th of April to Jones and Raiman, he extends his demand to .the whole of .the proceeds, and so he does in his letter of the same date, to jSf. S, G.Sf Co.

My opinion, accordingly, is, that the plaintiff is entitled to the full benefit of the assignment of the 7th of February, 1811, and in preference to the defendant, Kauman ; and that he is to be first and exclusively paid, out of the property therein assigned, to the extent of his whole demand, and that the deed of trust of the 28th of February, 1811, so far as it is inconsistent with the provisions in the deed of the 7th, or with the right of the plaintiff to be paid as aforesaid, is, and ought to be, null and void. That the plaintiff may take such an order of reference as the nature of his case may seem to require. That the defendant, Kau%nan, account for the proceeds, under that assignment, with costs of suit, and that the hill, as jo the defendants, G?W" pert S. Gompcrts, Israel B. Jacobs, and Seixas Nathan, be dismissed without costs; and that the bill, as to the other defendants, viz. Samuel Jones, jun. and the defendants, who are creditors, be dismissed with costs, to be paid out of the surplus funds, (if any,) after the demand of the plaintiff has been previously paid.

Decree accordingly.